Facts of the Case

The petitioners, M/s Mongal Deep Enterprise, traders operating under the Monginis/Mio Amore food franchise and registered under the CGST Act, 2017 and WBGST Act, 2017, challenged an ex-parte assessment order dated 11.12.2023 passed under Section 73 for the period July 2017 to March 2018, and the ex-parte appellate order dated 01.03.2025 affirming it. The demand of Rs. 2,28,241 arose from a show cause notice dated 29.09.2023 alleging mismatch between Input Tax Credit claimed in FORM GSTR-3B and that reflected in FORM GSTR-2A. The petitioners contended they were unaware of the show cause notice and could not respond, resulting in an ex-parte order, and that their subsequent statutory appeal was also dismissed ex-parte without considering the grounds raised.

Issues Involved

  1. Whether an ITC-mismatch demand confirmed under Section 73 without following the reconciliation procedure mandated by Circular No.183/15/2022-GST is sustainable.
  2. Whether the ex-parte adjudication and appellate orders, passed without service of notice or consideration of the appeal grounds, violate natural justice.

Petitioner's Arguments

  • Before confirming any demand on account of ITC mismatch between GSTR-3B and GSTR-2A, Circular No.183/15/2022-GST mandates the proper officer to first seek details from the registered person and verify fulfilment of the conditions under Section 16 of the CGST Act - a procedure that was never followed.
  • The show cause notice was never served, leaving the petitioners unaware of the proceedings and unable to file a reply, resulting in an ex-parte adjudication order.
  • The subsequent statutory appeal, filed with the requisite pre-deposit, was dismissed ex-parte without considering the grounds raised, rendering both orders ex-facie illegal.

Respondent's Arguments

  • There was no illegality or irregularity in the proceedings; since the petitioners did not file any reply to the show cause notice, the adjudicating authority was justified in proceeding ex-parte.
  • An opportunity of personal hearing had been afforded to the petitioner, which was not availed, so the plea of violation of natural justice could not be sustained.

Court Order / Findings

  • On perusing the screenshot of the show cause notice and the impugned orders, the Court held that the impugned orders were passed without adhering to the mandatory reconciliation procedure under paragraph 4 of Circular No.183/15/2022-GST, which requires the proper officer to first seek details and verify fulfilment of the Section 16 conditions before confirming any ITC-mismatch demand, making out a prima facie case for interference.
  • Without going into the merits or setting aside the orders outright, the Court directed the petitioners to file a comprehensive representation with supporting documents by 30 September 2026.
  • The concerned authority must consider and dispose of the representation in light of Circular No.183/15/2022-GST by a reasoned order after affording a hearing, communicating the decision within a week, while remaining free to decide independently on merits.

Important Clarification

  • An ITC-mismatch demand under Section 73 confirmed without following the reconciliation steps mandated by CBIC Circular No.183/15/2022-GST - seeking invoice-wise details and verifying the Section 16 conditions before confirming the demand - is vulnerable to being sent back for fresh consideration.
  • Courts may resolve such disputes through a representation-and-reasoned-order mechanism rather than an outright quashing, keeping the adjudicating authority free to decide independently on merits.

Sections Involved

  • Section 73, CGST Act, 2017 - determination of tax not paid/short paid.
  • Section 16, CGST Act, 2017 - eligibility and conditions for taking Input Tax Credit.
  • Circular No.183/15/2022-GST - procedure for ITC reconciliation between GSTR-3B and GSTR-2A for FY 2017-19.

Decision – In Favour of

Disposed of with directions, in part in favour of the petitioner - fresh consideration directed per Circular 183/2022-GST without a ruling on final merits.

Case Details

  • Court: High Court at Calcutta, Constitutional Writ Jurisdiction, Appellate Side
  • Case No.: W.P.A 13375 of 2025
  • Coram: Justice Smita Das De
  • Date: 11th August, 2026

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